Section 98 - "Transfer" and "revocable transfer" defined
The definition is deliberately wider than a registered sale or gift. Any settlement, trust, covenant, agreement or arrangement can qualify. Revocability includes indirect re-transfer and any right to re-assume power over even part of the income or asset.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Section 98 is presented using the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The general commencement date is 1 April 2026. Earlier years and saved proceedings may remain governed by the Income-tax Act, 1961 and the repeal/savings framework.
2-minute professional decode
The definition is deliberately wider than a registered sale or gift. Any settlement, trust, covenant, agreement or arrangement can qualify. Revocability includes indirect re-transfer and any right to re-assume power over even part of the income or asset.
Who should test this section?
Section 98 is relevant to individuals and family structures when “transfer” and “revocable transfer” defined; advisers should trace the relationship, transfer and beneficiary mechanics instead of relying on ownership labels alone.
Evidence to retain
For section 98, retain relationship records, transfer instruments, consideration evidence, investment/capital-account workings and the attribution calculation connected with “transfer” and “revocable transfer” defined.
1961 Act bridge
| Legacy provision | Legacy heading | Mapping |
|---|---|---|
| 63 | "Transfer" and "revocable transfer" defined. | Renumbered / mapped |
The bridge is a research aid. Legacy case law carries over only after the current wording and transition rules are matched.
Rules and forms linked to this section
No provision-specific Rule was independently mapped from the current Rules register for this section. That does not mean the wider Rules are irrelevant.
Worked application
A deed transfers an investment portfolio to another person, but a side agreement allows the transferor to replace the trustee and direct that 30% of the portfolio be returned. The arrangement can be treated as revocable even though the main deed does not use the word “revocable”.
Common mistake
Under section 98, relationship by itself is neither enough nor irrelevant: clubbing must follow the precise statutory transfer, benefit and attribution conditions for “transfer” and “revocable transfer” defined.
Compliance approach
Identify the statutory trigger for section 98, lock the relevant tax year, reconcile the facts to the operative sub-section, preserve the evidence trail and separately test every linked Rule, Form, Schedule and exception before finalising the return position.
Numeric / timing checkpoints in the operative text
- No standalone numeric checkpoint should be inferred from the heading; read the operative text.
Related provisions
Current statutory text
Primary-source trail
- Consolidated Income-tax Act, 2025 (as amended by Finance Act, 2026) (official external source)
- Income Tax Department - Act/Rules/Forms hub (official external source)
- CBDT commencement material - Act operative from 1 April 2026 (official external source)
Source status: full Section 98 statutory text in the local source corpus; reconciled to the current consolidated Act control on 8 October 2026.